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Lab-grown diamonds to be 10% of total polished exports in three years: ICRA
Rating agency ICRA on Monday said that the share of lab-grown diamonds will increase to 10% of total polished exports over the next three years.
Lab-grown diamonds (LGD) have witnessed a sparkling rise over the last three years and accounted for 7.5% of the total polished diamond exports from India in the first nine months of FY2023, up from 1% in FY2019.
Besides attractive prices, LGDs have lower carbon footprint compared to natural diamonds, are less prone to supply disruptions and can be produced in different varieties with a high degree of customisation.
Commenting on its growth prospects, Sakshi Suneja, Vice President and Sector Head said, “The sales and profits of LGD players are currently being driven by huge volumes, which have more than offset the sharp (50%) decline in prices witnessed over the last two years. The ability of the players to continue generating such large sales volumes remains critical, especially in the backdrop of LGD’s limited resale value and its exposure to perception bias. We expect the LGDs to emerge as a separate category within the fashion and jewellery segment, catering to price-conscious customers, but not replace natural diamonds anytime soon. Its share within the total polished diamond exports is expected to increase to ~10% over the next two to three years.”
Exports of Lab-grown diamonds (LGD) have witnessed a sparkling rise over the last three years, growing by a CAGR of 70% and accounting for 7.5% of the total polished exports from India in 9M FY2023, up from 1% in FY2019. These diamonds are optically similar to natural diamonds but are priced much lower and have a lower carbon footprint. The sales and profits of LGD players are entirely currently being driven by huge volumes, which have more than offset the sharp (~50%) decline in prices seen witnessed over the last two years.
ICRA expects the LGDs to emerge as a separate category within the fashion and jewellery segment catering to price-conscious customers, but not replace natural diamonds anytime soon. Its share within the total polished diamond exports is expected to increase to 10% over the next two to three years.
Courtesy: Economic Times
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